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The evidence establishes that petitioner consistently and
substantially understated his income in 1980, 1981, and 1982.
Petitioner maintained inadequate records for both of his
businesses. Petitioner destroyed existing records at the Bijou
and instructed Killeen to destroy any records kept at the
Screening Room. Petitioner attempted to disrupt the IRS's
criminal investigation by sending Killeen on vacation and
counseling Killeen to lie to agents when questioned. Petitioner
dealt extensively in cash both personally and in his businesses.
We also consider it significant that petitioner pleaded
guilty to a violation of section 7206(1) for 1980. Although his
plea does not, in and of itself, establish a fraudulent intent,
we consider the crime as probative evidence that he intended to
evade taxes, especially when combined with other factors taken
from the record as a whole. See Wright v. Commissioner, 84 T.C.
636, 643-644 (1985); McGee v. Commissioner, 61 T.C. 249, 260
(1973), affd. 519 F.2d 1121 (5th Cir. 1975).
We conclude that petitioner possessed the requisite
fraudulent intent to evade taxes known to be owing for 1980,
1981, and 1982.
C. Conclusion
We find that respondent has clearly and convincingly proven
that the entire underpayments of tax for 1980, 1981, and 1982
were due to fraud.
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